Medicaid Partnership Policies: An Overlooked Tool

Medicaid Partnership Policies: A Powerful Planning Tool for Long-Term Care

One of the most overlooked tools in long-term care planning is the Medicaid Partnership policy. These specialized long-term care insurance policies are designed to work alongside Medicaid, allowing individuals to plan for future care needs while also protecting a portion of their assets.

With a partnership policy, benefits paid by the insurance policy can provide dollar-for-dollar asset protection if Medicaid is later needed. In practical terms, this means assets equal to the amount paid out by the policy may be disregarded for Medicaid eligibility purposes—an important advantage for individuals who want to preserve savings for a spouse or family.

Partnership policies must meet specific state requirements and must be issued by a licensed insurance professional. Because Medicaid rules and partnership standards vary by state, these policies are not appropriate for every situation. However, they are often worth exploring for individuals with moderate assets who want a structured way to combine insurance planning with potential Medicaid eligibility in the future.

It is also important to understand that Medicaid eligibility rules—such as asset limits and look-back periods—are separate from the terms of an insurance policy and should be reviewed as part of an overall planning strategy. Coordinating long-term care insurance with legal documents, financial planning, and realistic care expectations helps families prepare more effectively for the future.

Education is the first step toward protecting your independence and your legacy.